From 2008 to 2009 the U.S. economy
collapsed into the steepest recession it had seen since the 1930s. The $8
trillion housing bubble burst, thanks to largely unregulated, reckless financial
dealings by big banks and Wall Street. Nearly 9 million Americans lost their
jobs, 7 million more lost their homes and more than $2.8 trillion in retirement
savings flew out the window nearly overnight.
In the wake of the worst of it – but well before the recovery took hold – then-President Barack Obama and Democrats in Congress enacted strict financial regulations on banks and Wall Street traders to make sure nothing like the Great Recession could ever happen again.
But just two weeks into his new administration, Donald Trump issued an executive order starting the complicated process to remove many of those restrictions and to hand over control of the U.S. economy back to the bankers and CEOs who wreaked havoc on the lives of ordinary working Americans nine years ago.
“No one in this union needs to be reminded of how bad it got in 2008 and in the years that followed,” said International President Lonnie R. Stephenson. “For this administration to go after the very restrictions that were put in place to prevent economic calamity so that their friends on Wall Street can fatten their wallets – it’s unconscionable.”
During the collapse, IBEW’s inside construction members took a huge hit, shedding more than 25 percent of total man-hours from the pre-recession peak. Nine years later, the numbers still haven’t fully recovered.
“The recession was devastating for a lot of people,” said Assistant to the International President Jerry Westerholm, who was director of the Construction and Maintenance Department at the time. “The financial collapse stopped a lot of projects overnight, and it wasn’t like members were missing a couple of paychecks. This was long-term unemployment. People were taking part-time jobs just to survive.”
But it wasn’t just inside construction. The recession affected IBEW members in every branch. Outside construction lost 13 percent of hours from 2008 to 2009. Manufacturing lost more than 15,000 members as more than 200 employers closed their doors for good or cut back on shifts.
“It’s mind-boggling that we’d want to return to the policies that got us into this mess in the first place,” Stephenson said.
Before the reforms, profit-driven bankers engaged in extremely risky debt practices that brought on the housing crisis, which spread the economic pain to virtually every corner of the economy and around the globe.
Trump’s executive order starts the process of allowing banks to return to those high-risk, high-reward financial games. And the people he has surrounded himself with – including at least six former Goldman Sachs bankers – are some of the rollback’s biggest supporters. Treasury Secretary Steve Mnuchin worked at Goldman for 17 years and Gary Cohn, the director of Trump’s National Economic Council, was the bank’s president when it received a $10 billion U.S. government bailout and offshored more than 1,000 jobs to Singapore.
Former congressman Barney Frank, one of the authors of the Dodd-Frank bill that put restrictions on the banks following a massive taxpayer bailout in 2010, told the Washington Post, “This is a betrayal of [Trump’s] pledge to help the ordinary citizen against the big guys, against Wall Street. He is giving Wall Street what it couldn’t get through the political process.”
The administration has also sought to eliminate the Labor Department’s so-called “fiduciary rule,” which requires retirement investment advisors to give unbiased advice that helps consumers rather than lining their own pockets with back-end incentive packages.
Stephenson urged members to call or write their senators and members of Congress and the White House, telling them to oppose any rollback to Dodd-Frank legislation.
“We cannot sit quietly while this White House breaks its promises with giveaways to Wall Street at the expense of working people,” he said. “A lot of people – a lot of our brothers and sisters – were hurt by what happened in 2008 and the years that followed. Returning to the policies that caused that devastation is unacceptable.”